Does China Renewable Energy Investment Limited’s (HKG:987) CEO Pay Reflect Performance?

In 2008 Eric Oei was appointed CEO of China Renewable Energy Investment Limited (HKG:987). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for China Renewable Energy Investment

How Does Eric Oei’s Compensation Compare With Similar Sized Companies?

According to our data, China Renewable Energy Investment Limited has a market capitalization of HK$474m, and paid its CEO total annual compensation worth HK$1.4m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$1.1m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.7m.

So Eric Oei is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

The graphic below shows how CEO compensation at China Renewable Energy Investment has changed from year to year.

SEHK:987 CEO Compensation, October 16th 2019
SEHK:987 CEO Compensation, October 16th 2019

Is China Renewable Energy Investment Limited Growing?

China Renewable Energy Investment Limited has increased its earnings per share (EPS) by an average of 3.0% a year, over the last three years (using a line of best fit). Its revenue is up 6.8% over last year.

I’m not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

Has China Renewable Energy Investment Limited Been A Good Investment?

Given the total loss of 15% over three years, many shareholders in China Renewable Energy Investment Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Eric Oei is paid around the same as most CEOs of similar size companies.

We would like to see somewhat stronger per share growth. And it’s hard to argue that the returns over the last three years have delighted. So many would argue that the CEO is certainly not underpaid. Shareholders may want to check for free if China Renewable Energy Investment insiders are buying or selling shares.

If you want to buy a stock that is better than China Renewable Energy Investment, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.